Saturday, September 8, 2007

Train Wreck Of The Week Sept. 8

The police state, under the guise of terrorism and security, is expanding at an unprecedented clip, despite growing public outcry and concern about barriers to information. The government hides behind a security shield and the public is totally exposed. The cost of this secrecy to taxpayers last year was $8.2 billion. For every dollar spent declassifying documents, the government spends $185 to conceal documents.

This concealment and deception expedited the process for businesses to have 26% of contracts at No-Bid, for $107.5 billion just for last year.

Our president has issued at least 151 signing statements challenging 1,149 provisions of laws passed by Congress. Before 2000, presidents had signed fewer than 600 statements in 211 years.

Then there is the use of the state secrets privilege. Bush has used it 38 times. It was only used 59 times over the previous 23 years.

What we have is a secret fascist government. It is fine to have secrets and classification but this is pure abuse. We do not hear any objections from Congress or the Democrats, as there are things they’d like to hide as well. What has prompted this is that the public is getting more active requesting 21.4 million requests under the Freedom of Information Act versus 1.9 million just seven years before. Fifty-three of 57 agencies are backlogged for fulfilling requests. Twelve agencies have requests pending ten years or more, certainly well past the 20-day deadline. Needless to say, it is a stall.

The Fed continues to tell us the credit crunch will have little impact outside of real estate. They must think we are all morons. In the Fed’s Beige Book, four of 12 districts reported that their economies continued to grow. They failed to tell us the conditions in the other eight regions. They evidentially are not interested in full disclosure, only reflective disclosure. The report is full of lies and omissions and it is enough to make you puke.

Planned layoffs rocketed in August as the housing slowdown and subprime mortgage debacle led to record job cuts in the financial sector. Announced layoffs surged 85% to 79,459 in August from 42,897 in July. Fifty percent came from the financial sector at 35,752.

The first truly global bubble in asset pricing has broken and unfortunately it is accompanied by a credit crisis.

The OECD says, “The US economy faces a significant economic slowdown that should lead the Fed to ease interest rates. The housing sector is set to exert a longer- and more-potent-than-expected drag and confidence has weakened in the US. As a result GDP growth is projected to fall distinctly below potential during the second half of the year, following the strong rebound in the second quarter. This may be a case for some easing on rates.” Downside risk has become more ominous.

Martin Feldstein says the economy faces a triple threat from housing: a sharp decline in home prices and construction; higher borrowing costs and a freeze in the credit markets stemming from subprime-mortgage losses; and fewer home equity loans and refinanced mortgages, leading to less consumer spending. His speech ending the foray at Jackson Hole, Wy. was a gloomy end to the conference, which had many pessimistic participants.

Nobel prize winner Robert Mundell is an idiot. The economist says the euro’s steady appreciation against the dollar in the last several years threatens the European economy by tipping it into deflation. Eurozone members have said they can tolerate the euro at $1.44. Everything we have ever read by this economist we have disagreed with. In his ideas for the Western Hemisphere he advocates all currencies being hooked to the dollar or to be a dollar economy.

More than 100,000 Americans are on our Gestapo’s watch list and no fly lists. If you criticize the president you end up on the list, and you are banned from airline flights, harassed at airports, strip-searched, roughed up and even imprisoned. This is part of the demise of freedom in America. They not only have a list for terrorist suspects, but of journalists, academics, activists and politicians. Federal senators and congressmen have been detained a number of times. Bush and Cheney are into humiliation and that is what should expect from pedophiles. Only depraved dictators do this kind of things and that is what we have.

Commercial real estate prices should fall 15% over the next year in the broadest decline since 2001. People are not willing to do deals right now. They expect lower prices. In July, investors bought the fewest commercial properties since 8/06 and apartment building acquisitions were down 50% from June. There is a stampede to get out. The estimate we project is a 15% drop over the next two years. The Bloomberg Property Index fell 2.7%. We are starting to see forced sales of assets to pay off outstanding debt. Some companies need cash infusions and in this market they are not easy to come by.

The number of job cuts by corporations announced in August jumped 85.2% from the number reported in the prior-month of 79,459. That is up 21.7% from August 2006, when the cuts were 65,278. Job cuts this year total 515,855, 4.3% fewer than the 538,914 in the first eight months of 2006.

The finance industry cut 35,752 jobs last month due to the collapse of the mortgage and subprime markets and on Wall Street.